Friday, February 27, 2015

It’s way past time that I looked at the newest major way for
people to make money.

The first time I read about it was a year and a half ago in
a Thomas Friedman New York Times
column. Titled “Welcome to the Sharing
Economy,” it described Airbnb, an accommodations-reserving company then less
than five years old but gigantic, with places to rent available in 34,000
cities and 192 countries. The piece was
informative, but displayed two of Friedman’s most irritating tendencies. First, it seemed giddy about the possibility
of people selling access to their resources, combined with the let-them-eat
cake mentality he has shown on other topics (“The skills required for any good
job keep rising – a lot of people who might not be able to acquire those skills
can still earn a good living now by building their own branded reputations,
whether it is to rent their kids’ rooms, their cars or their power tools.”). Second, he once again tied a barely related subject
into green politics (“Just think how much better all this is for the
environment – for people to be renting their spare bedrooms rather than
building another Holiday Inn and another and another”).

Yet the final two sentences of Friedman’s column were
prescient: “The sharing economy – watch
this space. This is powerful.” Although Airbnb was, in fact, a huge company
when he wrote the piece, it has continued to prosper. It is joined by amateur taxi providers Uber
and Lyft, the former of which does business in over 50 countries, and any
number of other similar businesses with the same or other specialties. A lot has been written more recently on the
sharing economy, with views of it ranging from glowing to execrable, so it is
clear to many that, somehow, it must be dealt with.

So how can we assess this movement? This week, the positives.

First, the sharing economy is indeed a legitimate means for
people needing money to get it. The
sharers not only pass along their resources for a price, but also invest their
time, energy, and knowledge in the process.
All of these things are often surplus for them, especially among those without
regular jobs.

Second, it is a proper descendant of eBay. People have been selling their unneeded items
there for almost 20 years now, with the company, as with Uber, Lyft, and
Airbnb, not owning anything that changes hands but only taking money from those
executing the transactions. EBay has
been a boon for vast numbers of people, for collectors, suppliers, and bargain
shoppers as well as its investors, and it would be silly to say that its
overall effect has not been positive.

Third, other sharing sites, such as TaskRabbit, help people
get paid for their surplus time. They
have no minimum wage as such, but allowing the otherwise unemployed to earn
something, somehow, is in itself a good thing.

Fourth, the sharing economy fits well with the times we are
in. Although there is a permanent jobs
crisis, neither political side has been doing much of anything to end or even
alleviate it, so, improving employment levels notwithstanding, many people are
stuck not working. It allows them ways
of earning money, in some cases, even without being physically present. It also helps those who have lost good-paying
work without finding it at similar compensation but have fixed expenses,
especially for cars and housing, by providing the means to defray them without
giving up their houses and vehicles altogether.

Fifth, it is strongly market-based. With so many companies and providers, the
amounts charged for tasks, rides, and night’s stays will settle at amounts
determined by supply and demand. There
will be little concern about wide-scale overcharging, as the systems will allow
others to easily undercut prices that are truly, as opposed to seemingly, too
high. Sharing applications also have the
potential to slash market prices for products which are, in fact, grossly
overpriced due to not enough people selling them.

Sixth, those offering resources through Uber and Lyft, and
to some extent Airbnb, can be seen as franchisees, a well-established category
of business with its own sets of strengths and restrictions. More franchises, held by willing
entrepreneurs, generally mean more solid, taxpaying business activity.

Seventh, it provides opportunity, even if often meager, for
people to sell skills nationwide.

These seven points, of course, are only half the story. For the problems and disadvantages of the
sharing economy, along with how we should best handle it, come back in two weeks.

Friday, February 20, 2015

In January, I spent two days apiece in Qatar, Bahrain, Oman,
and Kuwait, almost entirely in the largest cities of Doha, Manama, Muscat, and
Kuwait City. Not business – I had been
to Dubai several years ago and liked what I saw, so returned to the area.

So what did I see this time?

First, note that I handpicked probably the four safest, most
prosperous countries in the region. I
stayed out of much poorer Yemen, a good thing since machine guns went off in
its capital that week, and Saudi Arabia, still not big on general
sightseers. Although all four are more
or less absolute monarchies, with the king or sultan taking at least the role
of permanent president, they have done superbly at not only getting into the 20th
century, where not all were 50 years ago, but further into the 21st
than almost any others. Their
infrastructure is first-rate and getting better. I have never seen more construction anywhere
than in Doha. The new airport with free
Internet computers was finished last year, a city rail system is being
assembled underground, and it seemed like every other building was either going
up or being remodeled.

Second, every single person I encountered, with the possible
exception of a man who didn’t want me leaning back in my airline seat, seemed
civilized. Although my ordinary Western
wear of polo shirts and khakis was not rare, it was in the minority, but nobody
seemed offended that I was there. People
at hotels, restaurants, or even market stalls even went well past that to be
solicitous. When I went to the desk of
my unassuming lodging for more toilet paper, I was assured that all I needed to
have done was to call them and they would have brought it up to my room. I like to think that the cause was that the
locals’ Bedouin ancestors, going through the desert, were critically dependent
on the hospitality of others, and passed it along in cultural form.

Third, those countries were excellent travel values. The round-trip airfare from JFK to Doha was
$680, which seems substantial until you see that much closer locations such as
Rio de Janeiro, Casablanca, and even London and Dublin were priced higher. On the ground, I stayed at places costing $37
to $85 per night, choosing as I usually do low-end hotels with private rooms
and baths and decent online ratings, and ate somewhat like a local at smaller
restaurants and food stands. The meals
rarely cost me more than $15 and usually much less. Each hotel also had a fine free breakfast
buffet, and I had hummus, olives, feta cheese, orange juice and pita bread for eight
days straight. Taxis cost less than in
American cities, and museum admission charges and the like were nominal or
nonexistent.

Fourth, the weather was wonderful. It was dry, in the 70s and 80s during the day
with ample but not intense sun, and in the 60s at night. Given that I returned to a second straight
unseasonably cold Catskills winter, which has continued throughout the three
weeks since, it was just the break I needed.

Fifth, whatever you think about the first Gulf War, in which
Iraq invaded Kuwait and was repulsed by Operation Desert Storm, the Kuwaitis
have not forgotten the efforts of others.
When arriving there, someone said I should consider their country “my
second home,” and my visa was free. I
visited the Memorial Museum, dedicated to the invasion – they had display after
display of the nations which had liberated them, and an entire wall, including
the names of every American soldier who had died there, honoring the United
States. Although it may seem that people
in countries we have rescued “should” have that attitude, it doesn’t take much
international travel to see that such a viewpoint is hardly the norm.

Sixth, physical safety in all four places was complete. Whether on fairly dark streets near the market
in Muscat, walking through a construction zone in Kuwait City, or though the mazelike
narrow streets of Manama, there was clearly nothing to fear. To be sure, they were all worthy of big-city
precautions, but beyond that there were no problems.

Seventh, with their British colonial heritage, English is
the second language in all four countries, and is on almost all signs. That is convenient for those of us who know
little Arabic. English also served as a
common tongue; in Muscat I often heard Indians, quite common there, and locals
doing business in English, even though it was primary for neither. I also talked with a man working at a candy
store, found out he was from Iran, and determined that his English was better
than his Arabic. Tourists traveling to
those places, at least in the cities, are not at all handicapped by not knowing
other languages.

Eighth, I never did see another known American. I also talked with people from Bosnia, Sudan,
Sri Lanka, India, and Great Britain, but not from here.

Ninth, a few scattered observations. As expected, there were any mosques, with loudly
broadcasted calls to prayer. It is not
necessary to dress formally for public buildings, but the shorts and jeans
should stay home. In general, the
countries were good places to see how people do things differently but still effectively.

So, it was a great week-plus without thinking much about
American jobs. One of my usual topics,
though, did present itself. The quality
of what and how much they are building made the case for a national American
infrastructure project even stronger. It
would be a shame for Americans to consistently note, upon return, that places
like Qatar and Kuwait are more advanced than we are, but at the rate we are
going we will be there soon. There is a
lesson here – if we cannot accept that not all success comes from our country
and ideology, we will not be the world’s leader for long.

Friday, February 13, 2015

Last month had President Barack Obama’s sixth State of the
Union address, with only one from him to come.
It drew comments ranging from “meaningless” (Jennifer Rubin in the Washington Post), to “combative” (the New York Times Editorial Board) and “replete
with a certain swagger” (Eugene Robinson, also from the Post, on to his “best yet” for its relative lack of citizen vignettes
(Alexandra Petri, likewise).

I was glad to see the emphasis Obama put not only on the
American economy, but on jobs in particular.
While some of his claims were narrowly selective, such as that “over the
past five years, our businesses
(emphasis mine) have created more than 11 million new jobs” when either
including other positions lost or changing the time to four or six years would
make it much less favorable-looking, politicians will be politicians, and of
more concern was what he said about the future.

The president’s stated wishes were a mixture of ideas, some good
for employment and some bad. On the down
side, we heard yet again, though thankfully not in a belabored way, about the
need for a higher minimum wage, defended by the difficulty to “support a family
on less than $15,000 a year.” To name
just one objection, when we have a permanent jobs crisis, we do not have the
luxury of legally mandating that all positions pay enough to fully provide for
multiple people.

Other of Obama’s proposals would also, as Rubin wrote, “put
more burdens on employers.” Two were federally
required paid sick leave and paid maternity leave. He also called for a “law that makes sure a
woman is paid the same as a man for doing the same work,” presumably stronger
or more results-based than the one designed to serve that exact purpose that
has already been on the books for some 51 years. While it is true, as he said, that “nothing
helps families make ends meet like higher wages,” nothing gives families a more
sudden and severe financial setback than being put out of work, possibly due to
one’s employer being simply unable to pay higher mandated costs.

The other points in the speech, though, were favorable to jobs. I counted six, which were four or five more
than he had a year before.

First, he said we have emerged from the recession. Though self-serving, that statement still has
a no-excuses flavor which might stifle contrary, action-inhibiting words from
other Democrats. Second, he mentioned
the need to pay people properly for overtime.
Abuse of statuses such as “manager” and “contractor” have too often facilitated
employers circumventing such laws, which, even in a job-scarce environment,
should not be allowed to deteriorate.
Third, his requested strong connections between community colleges and
the companies most suitable for hiring their graduates are not only critically
necessary but in need of ongoing, proactive maintenance. Fourth, although vaguely presented, his idea
of rewarding companies investing in the United States should affect tax laws
much more than it does. Fifth, his call
at the end of the speech, “if you disagree with parts of it, I hope you’ll at
least work with me where you do agree,” makes it clear that responsibility for
refusals to discuss or negotiate falls, barring the absurd idea that none of
his proposals could under any circumstances be acceptable, squarely on
Republicans.

Obama’s sixth pro-jobs view was perhaps the first one to
take substantive form thereafter. He
mentioned the need for a large infrastructure initiative, which became a $478
billion item in the budget he sent to Congress earlier this month. He said on February 1 that he thought
Republicans were in favor of extensive infrastructure work, and that he and
they should negotiate not the general idea, but how it should be financed. He was right, as people of both parties can
see that American bridges, ports, highways, airports, sewer systems and so on
need repair, upgrading, and replacement, which must happen somehow. If congressional Republicans refused to even
debate how these things could be done, that would mean that they were going
beyond their beliefs and would be, for some other reason, simply acting in bad faith.

One more thing became distinct last month. Obama being a Democrat, and in many ways a
liberal, does not mean he consistently wants a larger government. One reason why the 11 million new business
jobs he cited was not as good as it sounds was that, during that time of his
presidency, government positions had decreased
500,000. Not increased less than
expected, not increased less than the pattern of the past few years, not “cut”
in the old Washington sense of asking for two million but only getting
1,500,000 – but actually down overall. He
said in the speech that his proposed tax increases on the wealthiest Americans
would not go for more workers in Washington, but would ease burdens on the
middle class. So, taking those two
things together, it was completely unfitting for House Speaker John Boehner to
rally Republicans by saying, as he did, that “making government bigger isn't
going to help the middle class.”

Overall, the 2015 State of the Union Address was true to
type. It was self-congratulatory, filled
with wishful thinking, and too vague in spots for even its general
purpose. I stay with what I wrote a year
ago, that there will be no fundamental American employment progress under this administration. However, as our president’s views on jobs
have improved, the reason for that is shifting.
Barring tragedy, Barack Obama will be President of the United States for
almost two more years, with almost no chance that he will be replaced by a
Republican before January 20, 2017 – at the soonest. It is now up to people of that party to
decide whether to negotiate and implement what they as well as Democrats, know
we need, or to throw out babies such as the infrastructure initiative with the
bathwater of further burdens on employers in the name of unconnected
ideology.

Friday, February 6, 2015

Another data month, another set of seemingly similar
results. There were 257,000 net new seasonally
adjusted United States jobs in January, very close to the 252,000 gained in
December. Headline unemployment ticked
up 0.1% to 5.7%. Labor force
participation reversed its 0.2% December fall and is now at 62.9%, whereas the
employment to population ratio, steady last month, gained 0.1% to reach 59.3
percent. The number of long-term
unemployed, or those officially jobless for 27 weeks or longer, held at 2.8
million, and there are still 6.8 million working part-time for economic
reasons, or wanting a full-time position but not finding one.

When looking at seasonally unadjusted numbers, though,
January, as always with that month, was less favorable. There are now almost 9.5 million people
jobless, up over 1.1 million from December.
Unadjusted official unemployment jumped from 5.4% to 6.1%. As for people marginally attached to the
labor force, those wanting work but not looking for it for a year or longer
shot up about 10% to 3.6 million, though there were 58,000 fewer describing
themselves as discouraged. With no other
significant changes in other work statuses, the AJSN, or American Job Shortage
Number, is now over 19.5 million, as follows:

Although much of this data, net of clear seasonal
differences, has leveled off over the past several months, the American jobs
situation is still better than a year ago. In January 2014 the AJSN was 20.6 million,
with many more officially unemployed and discouraged. Two numbers which have worsened since then,
though, are those not looking for the previous year, up 129,000, and
expatriates, almost 1.3 million higher.

So how good is the American employment condition now? The last year or two remind me of a dieter losing
half a pound a week – improving admirably but never greatly. Can our economy continue to progress this
steadily for a few more years, with no recessions? I am not optimistic, and still see no reason
for much larger gains no matter what happens.
However we are doing better, with the turtle plodding forward
once again.

About Me

The author of WORK'S NEW AGE, the 2012 IPPY Award-winning book which tells the truth about what is happening with jobs in America, the author of CHOOSING A LASTING CAREER, which tells which jobs will be good not only now but in decades to come, and the creator and keeper of the AJSN (American Job Shortage Number), the key economic indicator showing latent demand for jobs in the United States.
All blog posts and blogger's comments copyright 2017, 2016, 2015, 2014, 2013, 2012 by James B. Huntington. All rights reserved.